Branded Pharmaceutical Manufacture: Pharmaceuticals manufactures develop prescription and over the counter products that are used to prevent or treat illnesses in humans and animals. BRAND name drugs or manufactures are those medications that have patent protection. So once the product has been approved, branded manufactures generally purchases bulk chemicals or biological products and manufacture the product, which is then formed and filled into packages and distribute to centralize sales distribution offices or ware houses. For example, Belsomra, Ambien, Lunesta etc
Generic Manufacture: Generic drugs are produced and distributed without patent protection, and industry operators are not significantly engaged in the research and development of new drugs. A generic drug is defined as “ a drug product that is comparable to a brand/reference listed drug product in dosage form, strength, quality and performance characteristics and intended use.” Although the distribution process is the same, the design of the channel may be substantial different comparing to branded drugs. For example, an increasing numbers of generic manufactures are locating and forming partnerships with Indian and Chinese manufactures. Generic drugs have no patent, which lead to lower prices and lower margins. Drug example Zolpidem
Wholesaler:
Pharmaceutical wholesalers act as middlemen for retail drugstores. They stock brand name drugs, generic drugs and sundry items to sell to retail, hospital and clinical pharmacies. They buy directly from the manufacture. Examples of the wholesalers in pharmaceutical world are McKesson, AmerisourceBergen, and Cardinal wholesalers.
Retail Pharmacy: Also known as Community Pharmacy is a type of pharmacy that sells drugs to patients. The retail pharmacy market has greatly consolidated such that top five pharmacy chains now control 85% of the market. Examples of some of the largest retail pharmacies are CVS, Walgreen and Rite Aid.
Specialty Pharmacy: A specialty pharmacy is a specific type of pharmaceutical delivery system which coordinates delivery and offers comprehensive support in the distribution of drugs which are high cost or complex and utilized to treat complex conditions. “Specialty pharmacies are distinct from traditional pharmacies in coordinating many aspects of patient care and disease management. They are designed to efficiently deliver medications with specialized handling, storage, and distribution requirements with standardized processes that permit economies of scale. Specialty pharmacies are also designed to improve clinical and economic outcomes for patients with complex, often chronic and rare conditions, with close contact and management by clinicians. Health care professionals employed by specialty pharmacies provide patient education, help ensure appropriate medication use, promote adherence, and attempt to avoid unnecessary costs. Other support systems coordinate sharing of information among clinicians treating patients and help patients locate resources to provide financial assistance with out of pocket expenditures.”
Pharmacy Benefit Managers (PBMs): PBMs are most often third party administrator (TPA) of prescription drugs programs but sometimes can be a service inside of an integrated health care system. They are primarily responsible for processing and paying prescription drug claims. They are also responsible for developing and maintaining the formulary, contracting with pharmacies, and negotiating discounts and rebates with drug manufactures. OR OBM is an organization that provides programs and services designed to help maximize drug effectiveness and contain drug drug expenditures by appropriately influencing the behaviors of prescribing physicians, pharmacists and members.
Payers:
In healthcare, generally refers to entities other than patient that finance or reimburse the cost of health services. In most cases, this term refers to insurance carriers, other third party payers, or health care sponsors. Medicare is an example of single payer but it is restricted to patients over 65 years of age.
Patients:
A person receiving or registered to receive medical treatment. For example a patient complaining of Insomnia, is placed on Belsomra.
Accountable Care Organization (ACO): Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.
The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.
Examples are Medicare Shared Service programs, Advance payment ACO model, Pioneer ACO model.

Group Purchasing Organizations (GPOs):
At a time when Congress is searching for ways to rein in healthcare costs, Group Purchasing Organizations (GPOs) are already bending the healthcare cost curve, increasing competition, and reducing healthcare costs for American hospitals and taxpayers. GPOs use high volume purchasing power to secure discounts for hospitals, introduce new and innovative devices to the market, and save the healthcare system up to $36 billion annually – which lowers healthcare costs for all consumers.
Buying Groups:
In its simplest form, a Buying Group is the coming together of similar independent businesses to leverage their combined purchasing power to receive better pricing and terms on the products they buy. Successful Buying Groups bring efficiencies to the supply chain rather than simply flexing their “market power” to extract a better deal. Efficiencies are created when Suppliers can rely on the Buying Group to perform functions more cost effectively for its Members as a group, than the current model of each Supplier dealing with each independent separately.
Example Montefiore buying Albert Einstein hospital
Pharmacy Services Administration Organizations (PSAOs):
Independent Pharmacies play a central role in U.S. prescription drug market distributing almost one in five drugs sold in the country. But small pharmacies often do not have the resources to handle the administrative burden of filing claims with health plans or purchasing stock from prescription drug wholesalers. Instead, they contract with PSAOs, to manage those functions. The most common services provided by PSAOs were negotiating with health insurances plans or pharmacy benefit managers, communication and help desk services. An example will be Progressive pharmacies.

Genetech Capacity Planning Case Study:

A: Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity, design capacity is the maximum amount of work that an organization is capable of completing in given period. Effective capacity is the maximum amount of work that an organization is capable of completing in given period due to constraints such as quality problems, delays, material handling etc.
Over the past few years, the simultaneous optimization of the product portfolio and manufacturing capacity has gained increased importance in the Pharmaceutical world. In the article “GenenTech’s – capacity Planning” pulled all their data and handed it to it capacity planning team in Ebersman’s group. The whole idea was look at the current structure and what we can do to move forward. What will it take to make it successful and what are the resources that they will need.
B: Biotechs uses biotechnology to manufacture drugs, which involves the manipulation of microorganism (such as bacteria) or biological substances (like enzymes) to perform specific process. Biotech drug makers essentially use those microorganisms or highly complex proteins from genetically modified living cells as components in medication to treat various diseases and conditions, from cancer to rheumatoid arthritis to multiple sclerosis. They focus primarily on R&D, beginning with the discovery of novel compounds, which then get ushered into the clinic for further testing. This process is often lengthier and difficult and costly than it is for standard based counterparts. They include vaccines, blood, or blood components, allergenics, somatic cells, gene therapies, tissues, recombinant therapeutic protein and living cells used in cell therapy.
Small molecule is a lower molecular weight organic compound that may help regulate a biological process. Most drugs are small molecules. Small molecules can have a variety of biological functions, serving as cell signaling molecules, as drugs in medicine. These compounds can be natural, artificial and detrimental such teratogens and carcinogens.
C: Genetech might be ok with Avastin but they seriously need to think to grow to facility in order to meet other demands and the high standards they are known for. I believe that they will encounter capacity shortage problems and if they don’t update and add a new facility.
D: Regarding CCP3 location, Ebersman was worried that it might become a management nightmare. He wondered if the site will become too big to manage properly. Also with the employee size doubling, they might not feel good as they currently do. Also it will be very hard to find the right leadership who will be willing to move offsite from US.
Another question was also raised regarding new technologies into the plant. Genetech’s scientists had been experimenting with various methods of increasing yields. There were risks and FDA was less familiar with the newer technologies and it could be more difficult to receive approvals.
E. Conclusion was Ebersman suggested and wanted to wait for more data from clinical trials before making commitments. They wanted more time to experiment with methods of increasing production yields.

Three Regulations that affects the Pharmaceutical supply chains:
1. A complex Regulatory distribution environment
2. Regulatory environment for wholesalers
3. Hatch-Waxman Act: The entry of biosimilars and generics.
4. Medicare modernization act

Six Outcomes that are needed to achieve competitive advantage:
They are:
1. Cost (reduce product cost, ensure timely and reliable delivery and maintain quality).
2. Responsiveness (responds to changes in demand quickly and at a reasonable cost).
3. Security (ensures supply chain are protected from disruption because of external threats. Produce product integrity and consistency).
4. Sustainability (controlled and minimal resource impact, both today and in the future).
5. Resilience (a system that can identify, monitor and reduce risks and disruptions as well as react quickly and cost effectively).
6. Innovation (provide customers with new products that are not only new but address needs that competitors have neglected)
Misaligned Incentives:
In oncology case there are misaligned incentives between payers and providers. The incentive for payers to to contain expenses for service under a defined structure. As a payer, the federal government decided to contain costs by lowering drug payment to providers. It created the ASP model, which reduces cost in the short term, but long term results may be overall increase to the market structure. This created a challenging environment for oncologists. Oncologists have to manage different inventories, need to have a back up system to deal with delays with specialty pharmacy, incurs additional administrative burden due to numerous calls and interruptions caused when the specialty pharmacy requires information for prior authorization.
In most cases Oncologists are treating patients who have cnacers. I think it will be better if they have more control or come up with a model where oncologists have not to worried about other things other than focusing and providing the best solution for it patients.